Why the EU Antitrust bites Apple (and makes Spotify happy)
According to the EU Antitrust, Apple allegedly "distorted competition in the streaming music market by abusing its dominant position for the distribution of streaming music apps through the App Store".
A few months have passed since the last fine on European soil raised by the Antitrust to Apple (read also: All the flaws of Apple according to Rustichelli's Antitrust ). Last November, in fact, the Italian Competition and Market Authority had sanctioned the companies Apple Distribution International and Apple Italia for 10 million euros for two distinct unfair commercial practices: dissemination of promotional messages of different smartphone models (iPhone 8 , iPhone 8 Plus, iPhone XR, iPhone XS, iPhone XS Max, iPhone 11, iPhone 11pro and iPhone 11 pro Max) in which the characteristic of being water resistant even up to 30 minutes was enhanced without specifying that this was possible almost exclusively in the laboratory and then branded as an "aggressive commercial practice" the refusal by the US giant to provide warranty assistance when those iPhone models were damaged due to the introduction of liquids, violating the warranty law of the Code of Consumption. Now, however, the EU Antitrust has moved against Apple, and in particular its Apple Music app, following a complaint from rival Spotify.
THE ACCUSATIONS MADE BY THE EU ANTITRUST TO APPLE
According to the Antitrust of the Old Continent, Apple allegedly "distorted competition in the streaming music market by abusing its dominant position for the distribution of streaming music apps through the App Store". This is what can be read in the accusation brought in writing by the authority to the person concerned at the end of the Commission's investigations into suspected violations of the rules. Addressees will now be able to examine the documents in the investigation file, formulate written briefs and request a hearing to submit their observations on the case before representatives of the Commission and national competition authorities.
WHAT THE COMMISSION SAYS
EU competition manager Margrethe Vestager explained: “Our preliminary conclusion is that Apple is a 'gatekeeper' for iPhone and iPad users via the App Store. With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the App Store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts the competition. This is done by charging high fees on each App Store transaction for competitors and forbidding them from informing their customers of alternative subscription options. "
A TECHNICALLY OPEN SYSTEM, BUT DEFACTLY CLOSED
In short, the Antitrust has challenged the mandatory use of Apple's in-app purchase mechanism imposed on developers operating on the music streaming platform to distribute their apps through the App Store. It would also be investigating the possibility that Apple will apply some restrictions to app developers that prevent them from informing iPhone and iPad users of alternative and cheaper purchase options.
In particular, two conditions that Apple imposes on developers who want space on its virtual showcase are in the sights of the Antitrust Authority: the mandatory use of Apple's proprietary in-app purchase system ("IAP") for the distribution of paid digital content , which effectively takes the form of a 30% commission on all subscriptions purchased via IAP, with most streaming providers having then transferred this commission to end users by increasing prices and the fact that, despite Apple allowing users to use music subscriptions purchased elsewhere, 'its rules prevent developers from informing users about such purchase options, which are usually cheaper'. In short, technically it is not a "closed system", but in fact there are few Apple users who buy outside of Apple systems.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/perche-lantitrust-ue-morde-apple-in-streaming/ on Fri, 30 Apr 2021 12:17:08 +0000.